The Oil Drum

This is a guest post by Alan Drake, a letter he sent to his youngest brother.

Peak Oil in Greater Detail

“Oil companies should fire all of their geologists and geophysicists and hire economists to replace them since economists are SO much better at finding oil”.
---- Old Saying in the oil patch

Here's some random facts to illustrate how inelastic supply of oil is once an oil province hits it’s “Hubbert Peak” and the super giant fields deplete...

This is a guest post by Gail the Actuary.

1. I love my SUV. Why can't we continue to use oil and gas as in the past?

George W. Bush has given us one reason why we need to make changes - Unstable foreign oil supply. Al Gore has given us another reason - Climate change.

There is a third reason that trumps the first two - WE DON'T REALLY HAVE A CHOICE. Demand for both oil and natural gas continues to rise each year, as the result of China, India and other countries wanting to adopt a lifestyle more like that in the United States. As we saw in Oil Quiz - Test Your Knowledge, world oil supply is likely to decline in the near future. With demand increasing and supply decreasing, there is certain to be a significant gap in the not too distant future.

Natural gas is similar. Like oil, we started with a finite quantity of it, and it is now depleting. The main difference is that we are dealing primarily with a gap between North American supply and demand, rather than world supply and demand, because natural gas is difficult to transport. Demand is rising, because natural gas is viewed as a less-polluting source of energy.

Natural gas supply is likely to decline in the next few years, because most of the larger, more productive sites have already been tapped. New natural gas wells are getting smaller and smaller, so that more and more new wells need to come on line each year, just to stay even. For a while, we were able to make up our shortfall with imports from Canada, but these have begun to decline. In the next few years, both US production and imports from Canada will be declining. It is doubtful that liquified natural gas imports from overseas will be able to fill the gap.

(7 more questions and answers under the fold...along with a study guide! Go Gail Go!)

Sugar Cane is back in the news. With oil prices resembling those of the early 1980s, it seems that all those efforts made by then in Brasil to step-up ethanol production make sense again. With the promise of a high energy return and a renewable production cycle, the cane culture might be set for a return.

It won’t take long to start hearing about sugar cane successfully planted and converted to ethanol closer to home than expected. But before the cane hype gets installed, please take a dive into the fascinating history of a plant that shaped the World.

This article has a Companion that adds geographic information to the text. A Google Earth file can be found here for download; when a mark like [Pxx] appears in the text double click in the corresponding placemark to get a view of the geographic location in focus.

For those who are expecting a Brazilian debunking, I am going to have to disappoint you. My previous debunking was not aimed at the issue of whether Brazilian ethanol is sustainable, but rather whether their example can be exported to the U.S. Whenever the topic of Brazilian sugarcane ethanol has come up, my response is generally that from what I have read, it appears to be a pretty good deal. Furthermore, I have never seen evidence to dispute the high EROEI claims of sugarcane ethanol. However, I will usually note that there are few comprehensive reports that have examined the process in detail, and I would feel more comfortable about the positive assessments if someone did such a study. My wish has been granted.